Tuesday 22 October 2013

Govt erects fresh hurdle for broadcasting companies

NEW DELHI: The government has erected yet another hurdle for television broadcasting companies. An order that mandates the Union home ministry's (MHA) clearance for directors of broadcast companies every three years has led to fresh uncertainty in the industry which has described it as a "retrograde" step.
The new norms, introduced by the home ministry, are expected to hit the 350-odd companies which run about 750 news and entertainment channels in the country by saddling them with a tedious and time-consuming verification process.
The new norms also say that if a company is applying for a new channel, the existing security clearance would have to be revisited. This is seen as including the acquisition/merger of an existing channel from another company. According to current practice, companies are given security clearance by the MHA at the time of applying for a TV licence which is considered valid for its 10-year duration or for till such time as there is an adverse report.
As a matter of fact, the same company could until now seek permission for additional channels without seeking security clearance. It was the information and broadcasting ministry's recent move to seek an opinion from the MHA on the validity period of the clearance that has led to the new norms.
Security clearances given by the home ministry was not time-bound, and a company was only required to report any change in their board of directors, senior management (such as the CEO) or shareholding pattern to the ministry of information and broadcasting, which in turn would seek a clearance from the home ministry. There was also no requirement to have fresh MHA clearance every time the same company launched a new channel.
The broadcast industry has expressed fear that the new norms will lead to harassment and delays since clearances from MHA can take anytime between three months to years. An I&B ministry official admitted this "will lead to vast amounts of paperwork since most companies have licenses pre-dating the three-year cut-off of October 2010. They will all have to seek fresh verification".
Ever since the I&B ministry approached the MHA a few months ago, applications have piled up; already, there are 40-45 channels whose approvals are pending.
Delays apart, the step is regarded to be "unnecessary" as a registered broadcaster can always submit an undertaking to the I&B ministry stating "no change in board of directors" on a year-to-year basis, until there's a change which has mandatorily to be pre-approved by the I&B ministry.
Ashok Ventakramani, CEO of MCCS, which owns ABP News, said, "It is not necessary at all, especially in cases where the director has not changed since the first clearance was obtained. I also think that they should revisit this condition, in cases where the company is 100% owned by Indian shareholders with directors with Indian passports. I don't see the need for such a rule in the first place in such cases."
Eenadu director I Venkat said that the move must be protested against. "The irony is that the government has given permission to all kinds of people with no credentials to start channels. With norms like these it is bona fide companies that will have a big problem. We must protest against this as an industry," he said.
Times Now CEO Sunil Lulla described the step as "retrograde" that was likely to slow down business. "The time taken for clearances is variable and such norms can bring businesses to a standstill. It will make the media business cumbersome and impact industry confidence," he said. Lulla added that the government dragged its feet in taking action against offending companies but was trying to bring in norms to make it difficult for established broadcasters.
Industry leaders pointed out that unlike previous years, few permissions had been given to TV channels. According to the present conditions, permission is granted only to companies registered under the Indian Companies Act. The details of their shareholding patterns, management and others are with the Registrar of Companies.
On the basis of information furnished in the application form for uplinking by broadcasters, the applications are sent for security clearances to MHA.
Broadcasters said that with FIPB approvals required there were adequate checks on companies. Besides, industry bodies like NBA and IBF along the I&B ministry, kept a close tab on the companies, they appointed out.

Times View
Instead of cutting red tape, the government seems hell-bent on tying up businesses with more and more of it. Media, particularly broadcast media, seems to be a favourite target of the government's regulatory zeal. The freshly-minted security rules are an example. We already know the excuse: This is a sensitive industry. Does that mean oil and gas — for example — is not a sensitive industry? A company in any other industry is free to appoint a person of its choice to the board; he/she serves as additional director till the appointment is ratified at the next annual general meeting of the company. Only the registrar of companies needs to be informed. Certainly, the laws of the land and of the industry must apply to all, including broadcast. A person with a criminal record cannot sit on the board of any company in any industry. Similarly, if rules on say, foreign investments are violated, then the government has a right to take action. But why unnecessarily add to the bureaucracy unless the objective is to harass? Why should there be any need for a separate clearance, especially if the company is 100% Indian? Why should there be a three-year expiry date on clearances? Why, for that matter, should there be a 10-year limit on licences, or any limit at all? Licences should be in perpetuity, subject to revocation only by a court of law and not the government. At stake is the larger and fundamental issue of freedom of media and freedom of expression. If governments are allowed the power to impose restriction after restriction and can suspend or cancel licences at will, then democracy itself stands threatened.
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